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How long would you wait to cash in or borrow against whole life insurance policy?

Public Comments

1. You don't cash in or borrow against the death benefit - the face value. So you'd have to wait, until you've paid in enough, to have enough to cash out. So if 10% of what you pay in, goes to cash value, and you pay $1,000 a year, then after 10 years ($10,000), your cash value should be $1,000. You can't put down $500 on a policy, and immediately borrow $100,000. It doesn't work that way.
2. It depends if you even have any money in it at all. It is NOT an investment.
3. Don't you find it silly to borrow your own money from a life insurance policy you paid for? Its a total ripoff. If you bought term and save the difference, you wouldn't have to borrow. You can take money out of your savings account anytime and don't have to put it back. Anyway, its generally after the first 2 years will there be cash value. However, you can only borrow the net surrender value, which is cash value minus the surrender charge. I'm guessing it will be few years until you can actually borrow something. Keep in mind if that you borrow, loan interest will be charged. Its usually 8%. If you don't pay this back and someday you die, the remaining loan balance plus interest will be deducted from the face amount of the policy. If you cancel the policy while there's a loan balance, you will be liable for income taxes on the remaining balance of the loan.
4. You can only "cash in" or borrow based on the accumulated cash value of the policy. The benefit face value has nothing to do with it. The policy will contain a table that shows cash value vs. policy years in effect. It will also address borrowing restrictions. Read the policy.
5. 'So if 10% of what you pay in, goes to cash value, and you pay $1,000 a year, then after 10 years ($10,000), your cash value should be $1,000' Not sure where she gets the 10% goes to the cash value. With my policy 90% goes to the cash value. After 10 years it'd be closer to $10,000. I wouldn't cash in or borrow from a whole life insurance policy. If you're looking to buy one in order to get money out of it then you're better off just using a savings account.